290 thoughts on “Dealing with property auction issues”
I won a bid at auction and I was told to pay 10% deposit of property price(£40400), to secure the house. The completion is with 42 days of hummer fall. My broker did find a good mortgage lender deal. After one week of the wining bid The mortgage lender surveyor asked the Auction to see the property . Auction house took more than ten days to sent the house keys to the mortgage surveyor. After the mortgage lender surveyor report came from lender saying the house is invaluable, because the house next door is non-standard and the house I’m purchasing The walls are of PRC construction and appear to have been repaired with a brick outer skin.
Therefore is there a PRC certificate?
The adjoining propetry is not repaired. The deadline for the completion is coming to the end, the seller solicitor never mentioned and didn’t add PRC certificate to legal package. My broker is been communicating with seller solicitor, but so far isn’t being helpful. We been asking them for the PRC certificate, but still no reply from them . We believe the PRC certificate should have been together with legal pack. The seller can’t sell the house without PRC certificate. Would you bee able to deal with this situation or to give some options. We do want to loose the deposit Thank you
We are unable to provide specific advice on our website. If you would like us to look into your matter in more detail, please do feel free to get in touch.
Auctions often represent a significant risk to purchasers. This is because normally an auction pack is supplied and nothing else. Often a bidder is not given the opportunity to ask questions and gather information about the property before bidding and there is no general obligation on a seller to include anything specific in an auction pack. This often means there can be undisclosed legal or physical problems with the property, particularly if the opportunity to have a survey undertaken is not available.
As a minimum, we would always recommend that a person thinking of bidding on a property at auction take the auction pack to their solicitor for consideration first. Many of our clients who have purchased property at auction have not done this and as a result have committed to purchase a property which they cannot or do not want to complete on for various reasons, meaning that they stand to lose their deposit. However, a solicitor will only be able to advise a client on the legal aspects of the purchase and further, unless specifically instructed to check the position on something, will not be able to identify problems unless they are obvious, particularly if the documentation is lacking. It would therefore be very important for a client to be specific about what they want to know when instructing their solicitor.
Hi all 5Feb 2021 Bought a property through online auction for investment purposes: 56days completion £6k paid immediately (non-refundable deposit) to secure the property + £300 I asked to complete quickly: Cash buyer & no searches required Transaction failed as the seller eventually withdrew from sale & sold the property privately citing completion dates passed
My solicitor’s firm: -was slow & even deterred me from buying -failed to complete the transaction on time -received the draft contract early (19Feb2021) but only given to me for signing 30April
The auction house -they were also dragging their feet (sending EPC late although requested from day 1) -blamed the seller even though another deadline was agreed among us -now withholding my deposit of £6k having previously hinted I should get it back due to exceptional circumstances -Haven’t even suggested to me that I could keep the deposit for another auction
Who is legally responsible for my losses? My solicitor or seller? Can I claim compensation from my solicitor for suffering financial damages, missing out on potential rental income (2yrs) + reimbursement of my deposit £6k
This situation could happen to anyone: The seller having found a “better deal” or not being happy with the outcome of the auction could withdraw from the sale. Both solicitors deny responsibility citing unfortunate circumstances. The buyer losing out on fees, deposit… Regards R
Thank you for your comment. While we would need to see the full auction terms and conditions as well as the auction pack and similar to determine whether the seller and/or your solicitor had been at fault here, it would in the first instance seem that the seller is more likely to be liable for this based upon what you have said.
At an auction, when the hammer falls a legally binding contract is formed between the seller of the property and the top bidder. This replaces the normal exchange of contracts that a property transaction on the open market would involve, but it is still a binding contract. If the seller withdrew from the sale after the auction ended with you as the highest bidder, then it may be open to you to seek to recover your losses of and occasioned by his breach of contract, or even seek specific performance of the contract from the seller should you be ready, willing, and able to complete the sale, but since you have said that he has sold to someone else the latter will be unlikely.
As regards a claim against the solicitor, this is less clear-cut. You would need to show that because of his acts or omissions, he breached his professional duty of care to you and directly caused you to lose out on the sale and incur those losses.
In terms of what you would expect to recover in Court, this will very much depend on whether the losses you have undergone were reasonably foreseeable.
This could be a misrepresentation, however this sounds like an unusual situation. Often the Official Copy of Title from the Land Registry would be included in an auction pack supplied before the auction and this would say whether or not the property is leasehold or freehold. It may very well have been this document was included, albeit only very shortly before the auction.
In some circumstances, a misrepresentation can occur when someone allows the other party to proceed on the basis of a known misapprehension that they do not correct. If you were told that the property was freehold and you were not supplied with anything to suggest otherwise, then there may be a misrepresentation. However, it would be necessary to consider carefully exactly what has occurred. It is not normally a defence to a misrepresentation claim to say that the aggrieved party could have discovered the truth. However, it would be important to consider whether or not it was reasonable of you to have relied on the suggestion that the property was freehold, if the auction pack contained information to the contrary.
Delayed completion: what are your options when someone in your chain of property transactions is late? With a group of strangers all working toward completing on the same date, it's a wonder it ever works out on time.
This collection of cases of property misrepresentation claims should remind all of us how important it is to tell the truth on a Property Information Form
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I won a bid at auction and I was told to pay 10% deposit of property price(£40400), to secure the house. The completion is with 42 days of hummer fall. My broker did find a good mortgage lender deal. After one week of the wining bid The mortgage lender surveyor asked the Auction to see the property . Auction house took more than ten days to sent the house keys to the mortgage surveyor. After the mortgage lender surveyor report came from lender saying the house is invaluable, because the house next door is non-standard and the house I’m purchasing The walls are of PRC construction and appear to have been repaired with a brick outer skin.
Therefore is there a PRC certificate?
The adjoining propetry is not repaired.
The deadline for the completion is coming to the end, the seller solicitor never mentioned and didn’t add PRC certificate to legal package.
My broker is been communicating with seller solicitor, but so far isn’t being helpful. We been asking them for the PRC certificate, but still no reply from them . We believe the PRC certificate should have been together with legal pack. The seller can’t sell the house without PRC certificate. Would you bee able to deal with this situation or to give some options. We do want to loose the deposit
Thank you
Thank you for your comment.
We are unable to provide specific advice on our website. If you would like us to look into your matter in more detail, please do feel free to get in touch.
Auctions often represent a significant risk to purchasers. This is because normally an auction pack is supplied and nothing else. Often a bidder is not given the opportunity to ask questions and gather information about the property before bidding and there is no general obligation on a seller to include anything specific in an auction pack. This often means there can be undisclosed legal or physical problems with the property, particularly if the opportunity to have a survey undertaken is not available.
As a minimum, we would always recommend that a person thinking of bidding on a property at auction take the auction pack to their solicitor for consideration first. Many of our clients who have purchased property at auction have not done this and as a result have committed to purchase a property which they cannot or do not want to complete on for various reasons, meaning that they stand to lose their deposit. However, a solicitor will only be able to advise a client on the legal aspects of the purchase and further, unless specifically instructed to check the position on something, will not be able to identify problems unless they are obvious, particularly if the documentation is lacking. It would therefore be very important for a client to be specific about what they want to know when instructing their solicitor.
Hi all
5Feb 2021
Bought a property through online auction for investment purposes: 56days completion
£6k paid immediately (non-refundable deposit) to secure the property + £300
I asked to complete quickly: Cash buyer & no searches required
Transaction failed as the seller eventually withdrew from sale & sold the property privately citing completion dates passed
My solicitor’s firm:
-was slow & even deterred me from buying
-failed to complete the transaction on time
-received the draft contract early (19Feb2021) but only given to me for signing 30April
The auction house
-they were also dragging their feet (sending EPC late although requested from day 1)
-blamed the seller even though another deadline was agreed among us
-now withholding my deposit of £6k having previously hinted I should get it back due to exceptional circumstances
-Haven’t even suggested to me that I could keep the deposit for another auction
Who is legally responsible for my losses? My solicitor or seller?
Can I claim compensation from my solicitor for suffering financial damages, missing out on potential rental income (2yrs) + reimbursement of my deposit £6k
This situation could happen to anyone: The seller having found a “better deal” or not being happy with the outcome of the auction could withdraw from the sale.
Both solicitors deny responsibility citing unfortunate circumstances.
The buyer losing out on fees, deposit…
Regards
R
Thank you for your comment. While we would need to see the full auction terms and conditions as well as the auction pack and similar to determine whether the seller and/or your solicitor had been at fault here, it would in the first instance seem that the seller is more likely to be liable for this based upon what you have said.
At an auction, when the hammer falls a legally binding contract is formed between the seller of the property and the top bidder. This replaces the normal exchange of contracts that a property transaction on the open market would involve, but it is still a binding contract. If the seller withdrew from the sale after the auction ended with you as the highest bidder, then it may be open to you to seek to recover your losses of and occasioned by his breach of contract, or even seek specific performance of the contract from the seller should you be ready, willing, and able to complete the sale, but since you have said that he has sold to someone else the latter will be unlikely.
As regards a claim against the solicitor, this is less clear-cut. You would need to show that because of his acts or omissions, he breached his professional duty of care to you and directly caused you to lose out on the sale and incur those losses.
In terms of what you would expect to recover in Court, this will very much depend on whether the losses you have undergone were reasonably foreseeable.
Please feel free to telephone our Litigation department at the Braintree office if you wish to discuss this further.
just bought a house from an auction and the legal pack said the house was freehold, even dvla right now says the house is freehold
but 1 day before the auction, the auctineers put a document in the legal pack saying it has a 999 years lease hold.
how can i solve this issue, what is my right. ı have been scammed
Thank you for your comment.
This could be a misrepresentation, however this sounds like an unusual situation. Often the Official Copy of Title from the Land Registry would be included in an auction pack supplied before the auction and this would say whether or not the property is leasehold or freehold. It may very well have been this document was included, albeit only very shortly before the auction.
In some circumstances, a misrepresentation can occur when someone allows the other party to proceed on the basis of a known misapprehension that they do not correct. If you were told that the property was freehold and you were not supplied with anything to suggest otherwise, then there may be a misrepresentation. However, it would be necessary to consider carefully exactly what has occurred. It is not normally a defence to a misrepresentation claim to say that the aggrieved party could have discovered the truth. However, it would be important to consider whether or not it was reasonable of you to have relied on the suggestion that the property was freehold, if the auction pack contained information to the contrary.